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Home My WebLink AboutREP FC 087 04/19/2005 2004-2006 REPORT OF THE COMMITTEE ON FINANCE DA"fl?: April 19, ?005 Re: Comm. No. 124/Bill No. 42 PLACE: Council Chambers 11ME: 930 a.m. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 Your Committee on Finance, to which was referred Bill No. 42, reports as follows: Bill No. 42, transmitted by Mayor Harry Kim via Communication No. 124, dated March I , 2005, submits for consideration the proposed Operating Budget for Fiscal Year 2005-06, totaling $277,449,000 in estimated revenues and appropriations (Part I-Volume I), and includes the operations of eleven of the County's special funds as well as the General Fund. Also submitted is the Operating Budget Proposal (Part 1, Volume II), which describes the departments and their programs, program objectives, highlights, program measures, expenditures, and positions. Additionally, Communication No. 124.1 from Finance Director William Takaba, dated March 1, 2005, transmitted a booklet containing reports titled Six Month Progress Report on Program Ofijeclives for- FY200d-0~ and Final Stahts Report on Program Objeciives,for FY2003-0-J. The reports provide information to the Council to assist in the evaluation of program accomplishments during the first six months of the current fiscal year and for the previous 2003-04 fiscal year. Among the communications received were letters from Finance Director William Takaba (Comm. 124.20, the Department of Liquor Control (Comm. 124.26), Corporation Counsel (Comm. 124.29), the Department of Environmental Management (Comm. 124.31), Department of Parks and Recreation (Comm. 124.33), Office of the Prosecuting Attorney (Comm. 124.28), and Office of the County Clerk (Comm. 124.34) responding to questions provided by the Legislative Auditor's Office at the Special Meeting of the Finance Committee on March 29, 2005 through March 31.2005. The operating revenue proposal is as follows: • Real Property Tax -Taxable real property values will increase by 18.5% after incorporating the new agricultural valuations (Ordinance No. 04-143) and the 3% growth cap on homeowner assessments (Ordinance No. 04- 121). Net taxable values, however, will increase by only 13.6°/o with the additional 20% home exemption on assessed values (Ordinance 04-123). Real property revenues will increase by $15,598,000 with the tas rate remaining the same. • Public Service Company Tax -This tax revenue increases by $880,000 based on projections of current collections. FC REPORT NO. 87 Communication 124 Bill 42 Page 2 • Licenses and Permits -Licenses and permits will increase by $2.7 million due primarily to the full-year collection of the vehicle and trailer weight tax increase that took effect January 1, 2005. • Interest Income -Interest earnings will increase due to a higher rate of return on investments. • Intergovernmental Revenues -State revenues will increase by $3.9 million primarily from inclusion of the Beverage Container Deposit Program ($250,000) and from increases in TA'f ($2,554,000) and F,MS ($l,l 17,000) revenues. • Charges for Services -Solid Waste tipping fee revenues will increase by $2.2 million due to increased tonnage and scheduled fee increases. • Other Revenues -Revenue source decreases due to reduction in land sales, debt reimbursement and departmental charges. The operating expenditure proposal is as follows: • Highways and Streets -Expenditures are increasing by $4.1 million as a result of Mass Transit's Capital Grant program and Highway Division's spending from the vehicle weight tax increase. • Health, Education, and Welfare -The decrease in expenditures is due to the reduction in funding by the Federal Government for the Housing Voucher program. • Sanitation and Waste Removal -Solid Waste operations increasing by $4.9 million due to the cost of handling increased tonnage, improving compliance, expanding recycling, and enhancing services. • Debt Service -The budget for debt service is based on our debt service schedule plus $800,000 to cover any additional debt. • Pension and Retirement -Contribution to the Employees' Retirement System increased by $4.3 million as a result of Act 181, establishing the contribution as a percentage of covered payroll. • Health Fund - "fhe cost of providing medical coverage for our employees and retirees continues to increase to $17.6 million. • Miscellaneous -Major expenditure changes include: Transfer to Self-Insurance Fund $1,000,000 Transfer to Disaster and Emergency Fund $1,000,000 Transfer to Capital Projects (Traffic Bldg-W./Hawaii) $1,500,000 Increase for Sewer F und's Replacement Fund Reserve $1,518,000 Proposed new positions that are included in the Operating Budget are: Civil Service 1 -Personnel Assistant I Corporation Counsel 1 -Legal Clerk III Environmental Management 1 -Accountant I -Administration Environmental Management 1 -Engineering Support Tech ITT (Sewer Fund) -Wastewater Division FC REPORT NO. 87 Communication 124 Bill 42 Page 3 Environmental Management 6 -Equipment Operator III -Solid Waste Division 4 -Solid Waste Transfer Station Attendant 1 -Civil Engineer III Finance-Accounts Division 1 -FRESH System Support Tech Finance-"treasury Division 1 - Accountantl 1 -Motor Vehicle Registration Clerk I Finance-Risk Management Division 1 -Risk Management Officer 1 -Clerk III Fire 7 -Fire Fighter (State Funds) 2 -Battalion Chief I -Account Clerk Housing and Community Development 1 -Housing and Community Dev Planner V (Federal Funds) Parks and Recreation-Administration 1 -Account Clerk Parks and Recreation-Aquatics 1 -Lifeguard [ (Pool) 1/2T Parks and Recreation-Maintenance 1 -Park Caretaker I Parks and Recreation-Pana`ewa Zoo 1 - 70o Animal Keeper II Planning 1 -Planner III 1 - 7,one Clerk 1 -Clerk II Police 1 -Police Sergeant 1 -Supervising Police Radio Dispatcher 2 -Police Radio Dispatcher II Prosecuting Attorney 2 -Deputy Prosecuting Attorney Public Works-Building Division 2 -Building Plans Examiner 1 -Building Inspector l -Electrical Inspector I -Building Permit Clerk Public Works-Traffic Division l -Account Clerk (Fuel "Fax) A summary of estimated FY2005-06 revenues and expenditures is shown below: RF,VENUES Account Description FY2004 FY2005 FY2006 $ Variance % Variance Actual Estimate Estimate General Fund Revenues Taxes Real Property Taxes 121,868,056 131,036,300 151,634,300 20,598,000 15.72 Public Svc Co Tax 5,332,478 5,120,000 6,000,000 880,000 17.19 Total Taxes 127,200,534 136,156,300 157,634,300 21,478,000 15.77 Licenses and Permits Bus. Lic& Permits 2,490,726 2,571,775 2,829,100 257,325 10.01 Non-Bus. tic & Permits 3,829,976 3,668,484 3,867,467 198,983 5.42 Total Lics & Permits 6,320,702 6,240,259 6,696,567 456,308 7.31 Intergovernmental Revenues Federal Grants 6,683,526 3,079,144 3,172,020 92,876 3.02 Federal Grants 1,107,786 1,463,600 1,220,443 (243,157) (16.61) Federal Grants 8,002,555 191,000 2,884,465 2,693,465 1,410.19 FC REPORT NO. 87 Communication 124 Bill 42 Page 4 State Grants 27,456,263 29,536,108 33,253,608 3,717,500 12.59 State Grants 899,785 749,695 714,804 (34,891) (4.65) Total Intergovernmental Rev 44,149,914 35,019,547 41,245,340 6,225,793 17.78 Charges for Services General Government 1,786,270 2,403,571 2,788,794 385,223 16.03 Public Safety 37,783 146,784 150,284 3,500 2.38 Highways & Streets 567,221 582,000 541,000 (41,000) (7.04) Parks & Recreation 777,749 814,125 830,080 15,955 1.96 Total Charges for Services 3,169,023 3,946,480 4,310,158 363,678 9.22 Totat Fines & Forteitures 527,210 1,322,500 1,374,500 52,000 3.93 Miscellaneous Revenues Interest Earnings 1,831,910 1,250,000 2,400,000 1,150,000 92.00 Rents 39,153 51,800 56,500 4,700 9.07 Disp of Fixad Assets 1.604,817 1,563,100 363,000 (1,200,100) (7678) Contrib/Dons FR Prvt Src 527,936 292,000 315,000 23,000 7.88 Reimbursements&Transfers 5,821,273 11,124,856 5,585,437 (5,539,419) (49.79) Sundry & Misc 326,311 338,300 322,717 (15,583) (4.61) Total Miscellaneous Revenues 10,151,400 14,620,056 9,042,654 (5,577,402) (38 15) Total General Fund 191,518,783 197,305,142 220,303,519 22,998,377 11.66 Revenues Other FUnd Revenues Highway Fund 17,081,859 18,948,033 21,268,904 2,320,871 12.25 Sewer Fund 5,891,416 7,563,497 9,477,686 1,914,189 25.31 Cemetery Fund 10,750 16,000 16,000 - - Bikeway Fund 24,925 181,000 171.000 (10,000) (5 52) Beautification Fund 153,058 215,000 225,000 10,000 4.65 Vehicle Disposal Fund 1,836,440 1,716,200 2,231,706 515,506 30.04 Solid Waste Fund 13,736,406 17,073,182 22,591,891 5,518,709 32.32 Golf Course Fund 954,471 1,006,304 1,006,304 - - Geothermal Rel Rev Fund 88,255 150,000 150,000 - - Housing Fund 11,929,362 14,783,676 12,776,977 (2,006,699) (13.57) Kulaimano Elderly Hsg Fund 243,385 457,800 392,800 (65,000) (14.20) Ouli Ekahi Hsg Fund 208,168 248,026 254,162 6,136 2.47 Geothermal Asset Fund 61,485 50,000 50,000 - - Total Other Funds 52,219,980 62,408,718 70,612,430 Total Funds 243,738,763 259,713,860 290,915,949 31,202,089 12.01 Less: Intertund Transfers 13,917,917 13,467,092 (450,825) (3.24) Net Revenues 243,738,763 245,795,943 277,448,857 31,652,914 12.88 EXPENDITURES Account Description FY2004 FY2005 FY2006 $ Variance % Variance Actual Budget Estimate General Fund Expenditures Legislative 2,272,944 3,855,022 3,703,308 (151,714) (3.94) Elections 378,548 583,654 505,902 (77,752) (13.32) Executive 1,154,882 1,133,216 1,204,087 70,871 6.25 Data Systems 816,486 881,296 928,552 47,256 5.36 Finance 5,864,422 6,732,240 7,085,591 353,351 5.25 Law/Corp Counsel 2,360,012 2,906,846 3,319,531 412,685 14.20 FC REPORT NO. 87 Communication 124 Bill 42 Page 5 Planning 1,792,391 1,982,622 2,259,247 276,625 13.95 Civil Service 1,225,616 1,345,282 1,641,866 296,584 22.05 Research 8 Development 1,598,012 1.797,582 1,830,668 33,086 1.84 Maintenance/Building 2,525,400 2,765,744 3,272,579 506,835 18.33 Public WOrks Admin 660,235 761,009 838,214 77,205 10.15 Automotive 2,006,569 2,048,604 2,872,505 823,901 40.22 Engineering 1,131,932 1,564,368 1,375,564 (188,804) (12.07) Police 36,016,644 39,089,777 47,961,562 2,871,785 7.35 Fire 20,397,602 25.228,987 27,222,630 1,993,643 7.90 Protective Inspection 1,554,285 1,751,201 1,891,302 140,101 8.00 Flood Control 236,141 153,939 153,939 - - AnimalControl 849,948 954,215 992,384 38,169 4.00 Civil Defense 753,366 513,832 468,793 (45,039) (8.77) Liquor Control 1,210,387 1,119,275 1,262,417 143,142 12.79 Prosecuting Attorney 4,938,008 5,866,468 6,264,053 397,585 6.78 Mass Transit 1,855,991 1,821,843 4,242,168 2,420,325 13285 County Physicians/Health 102,942 102,942 102,942 - - AginglHealth 8 Welfare 1,371,955 7,848,907 2,056,578 207,671 11.23 Cemeteries 206,439 273,632 273,632 - - Schools 52,130 55,000 55,000 - - Non-Profit Grants in Aid 900,000 726,000 900,000 174,000 23.97 Elderly Activities 2,611,699 2,919,719 3,051,241 131,522 4.50 Parks & Recreation 12,541,980 13,410,959 14,146,464 735,505 5.48 Environmental Mgmt 274,484 796,714 888,000 91,286 11.46 Transfers to Other Funds 14,834,440 10,169,655 15,467,092 5,297,437 52 09 Transfer to Debt Svc 23,589,685 24,921,138 27,500,608 2,579,470 10.35 Pensions & Contribs 25,893,208 30,872,038 33,277,600 2,405,562 7.79 Miscellaneous 3,737,076 6,351,416 7,287,500 936,084 14.74 Block Grants 1,776,529 - Home Grants 1,286,683 - Housing Grants 97,500 - Total General Fund 180,816,572 197,305,142 220,303,519 22,998,377 11.66 Expenditures Other Fund Expenditures Highway Fund 16,035,484 18,948,033 21,268,904 2,320,871 12.25 Sewer Fund 5,304,929 7,563,497 9,477,686 1,914,189 25.31 Cemetery Fund - 16,000 16,000 - - BikewayFund 2,619 181,000 171,000 (10,000) (5.52) Beautification Fund 201,666 215,000 225,000 10,000 4.65 Vehicle Disposal Fund 1,506,077 1,716,200 2,231,706 515,506 30.04 Solid Waste Fund 12,669,791 17,073,182 22,591,891 5,518,709 32.32 Golf Course Fund 898,011 1,006,304 1,006,304 - - Geothermal Rel Rev Fund 17,826 150,000 150,000 - - Housing Fund 12,457,117 14,783,676 12,776,977 (2,006,699) (13.57) Kulaimano Elderly Hsg Fund 250,716 457,800 392,800 (65,000) (14.20) Ouli Ekahi Hsg Fund 139,686 248,026 254,162 6.136 2 47 Geothermal Asset Fund - 50,000 50,000 - - Total Other Fund 49,483,923 62,408,718 70,612,430 Expenditures Total Funds 230,300,495 259,713,860 290,915,949 31,202,089 12.01 Less' Inter-Fund Transfers 13,917,917 13467092 (450,825) (3.24) Net Expenditures 245,795,943 277,448,857 31,652,914 12.88 FC REPORT NO. 87 Communication 124 Bill 42 Page 6 Your Committee originally reviewed the Operating Budget in conjunction with departmental program reviews on March 29 through March 31, 2005. Pursuant to Section 10-4, Hawaii County Charter, the Council also conducted public hearings on the proposed FY2005-06 Operating and Capital Budgets in Hilo on March 14, 2005, and in Kona on March 16, 2005. During the budget review Mayor Harry Kim restated his budget message regarding the goals and priorities oChis administration. The budget requests and allocations were prioritized based on the following goals and priorities: • Legal mandates • Equitable distribution of services • Stewardship of public assets • Administrative project priorities The Committee Member's concerns for each department are as follows: FINANCE • No funding mechanism in the proposed budget for purchasing land for the public PLANNING DEPARTMEN"C • Community Development Plan • Defining Important Ag Lands • Status on subdivision code • Status of fair share contributions being spent FIIZF DEPARTMENT' • Vacancies in vital positions • Status regarding rural fire stations: Na`alehu, Volcano, Pauilo, and Kalahoa • The transfer oC beach lifeguards to the Fire Department • 1~he need for equitable distribution of fire services PUBLIC WORKS • High rate of fatal car accidents on highways • back of maintenance in County facility • The removal of asbestos from the County Building • High cost of bidding jobs out and the lack of bid coming in • Status on road improvements CIVIL SERVICE • Status of union negotiations • Increasing cost of Workers' Compensation OFFICE. OF AGING • Service in rural areas FCREPORTNO. 87 Communication ]24 Bill 42 Yage 7 POLICE DEPARTMENT • 73 vacancies • Recruitment strategies include the Department's Cadet Program • Technology to enhance the Police Officers job • No quota system for traffic tickets • Lack of maintenance on Police facilities CIVIL DEFENSE • Lack of maintenance on Civil Defense facilities PARKS AND RECREATION • High cost of bidding jobs out and the lack of bid coming in HOUSING DEPARTMENTF • Affordable housing • Reduced levels of Federal funding COUNTY CLERK • Update of the County Code DEPARTMENT OF ENVIRONMENTAL MANUEMENT • Status of the closing of the Hilo Landoll • Status of the RFP for Waste to Energy Upon review of the Mayor's amended budget submittal on May 5, 2005, the Council may propose amendments as necessary. Your Committee on Finance is in accord with the purpose and intent of Bill No. 42 and recommends that it pass first reading. smc Hues Nors n&c ex Respectfully submitted, A RAKAKI x HIGA ~ COMMITTEE ON FINANCE. HOFFMANN HOLSCHUH ~ ~ ~ ' • d~' IKEDA ~ ISBELL .~ACOesoN _ ~ _ VIRGINIA ISBELL, CHAIR P~LACO ` FC REPORT NO. X87 SAF.4RIK ~ ADOPTED: _MQ~ 1 O LJUJ